Looking to give RFID adoption a jolt amid concern that early enthusiasm has dissipated, a blue-chip vendor group has banded together to help consumer products suppliers and retailers test the technology's ability to deliver measurable return on investment (ROI) within a controlled environment -- the promotional display. Why promotions? Consumer Packaged Goods (CPG) companies spend a lot of money on them. In fact, trade promotions are said to drive 12% to 15% of sales for major CPG companies, according to a study by ACNielsen. Yet, given the dollars and efforts expended, the returns yielded by promotions remain below expectations, the study contends. One key reason: a lack of retailer follow-through. A recent Massachusetts Institute of Technology (MIT) study found that slightly more than half of supplier promotions are carried out by retailers nationwide. The problem is store-level resource constraints -- including both people and processes -- limit the ability of retailers to efficiently get goods from the backroom and onto promotional displays. Retailers also struggle with synchronizing product availability with promotional campaign timing (e.g., when buzz is generated by TV and radio adverts and newspaper circulars) and, just as importantly, with feedback that helps suppliers measure campaign effectiveness. The use of promotions as an RFID test bed was originally proven by Wal-Mart and two of its largest suppliers -- Procter & Gamble's Gillette unit and Kimberly Clark. Gillette, for instance, ran numerous promotions through Wal-Mart stores monitoring the movement of "tagged" promotional displays through the supply chain -- from the distribution center to the store backroom and onto the store floor. Stores that executed promotions on time were said to achieve a 19% improvement in sales compared with those that didn't, according to a study conducted by EPCGlobal, the RFID standards body. Placing single tags on promotional display cardboard also proved to be easy: read rates averaged in excess of 97%, according to the study. Against this backdrop, OATSystems Inc., ADT (a unit of Tyco Fire & Security), and Intel Corp. are partnering to provide free RFID hardware, software, and services to CPG suppliers and retail chains interested in an automated approach to tracking promotions -- starting with the all-important back to school season that kicks off in late July. Intel, meanwhile, will subsidize the creation of ROI reports drawn up by an independent academic institution of the program participant's choice. As currently envisioned by the partners, the test program will extend over the next six months, and involve ten stores at five different retailers and five to ten large consumer products manufacturers. The partners declined to say how the program is costing them in free products, services, and time. "It's a significant investment," declares Randy Dunn, director of RFID Sales & Marketing at ADT, pointing to the infrastructure required to outfit both retailers and suppliers. Already participating in the program are OAT customers P&G (Gillette) and Kimberly Clark, as well as an undisclosed over-the-counter drug maker, according to Marc Osofsky, OAT's vice president of product management and marketing. Six retailers (also undisclosed) have also signed up. They include a big box retailer, a grocery store, a drug store, and an office products specialist, he adds. ADT will work with each retail site to determine optimal placement of read points, antennas, and portal frame. OAT's OATxpress software will be used to capture, filter, and manage RFID data collected from promotional events. Meanwhile, the company's OATaxiom will provide analytics as well as a supplier portal to share and evaluate promotional programs between retailers and suppliers. The Intel-sponsored research study will track control groups against live implementations and provide analysis at the end of the six-month trial. Using EPC-Global standard compliant technology, the program aims to shed light on how companies from both sides of the supply chain can generate operational improvements in business processes related to promotions management. "If they use open system infrastructure there's a lot of goodness associated with driving costs down and [supporting] innovation," Dunn explained. "That's an important concept to get right early in the game." Though promotions may seem like a mundane starting point, it's a natural place to begin given the complexities in moving products within tight time parameters, OAT's Osofsky says. "[Suppliers] want to see if stores move [promotional items] out too early and create stock out problems as advertising and circulars hit, driving people to the store to buy competitors' products," he suggests. And if promotional items are moved out too late in the cycle, both the supplier and retailer suffer from opportunity lost, he adds. Store managers are dealing with shrinking headcounts and skill levels, which exacerbate the problem, Osofsky says. To correct this, large retail chains and suppliers spend hundreds of millions of dollars to dispatch employees from corporate to monitor store-level promotional campaign compliance. RFID tracking will help lessen the need to visit all stores, as both supplier and retailer will have the ability to collect sufficient tracking data. "If they identify the stores that do it right, they don't need to spend money sending people there -- that doubles the effectiveness [of this program] right there," he explains. And that's exactly what many retailers need for motivation to at least consider adopting RFID on a grander scale, noted Janet Suleski, an analyst at AMR Research Inc. (Boston). Programs like this help retailers understand operational improvements on a "tactical level," but unless they help identify new business processes that streamline store-level execution they end up having limited impact, she notes.